March 16, 2020

U.S. House Passes Second Major Piece Of Legislation Dealing With COVID-19

Policymakers in Washington have already provided economic relief measures for American businesses and employees in the face of COVID-19, and they are working to provide more. President Donald Trump announced in remarks on March 11 that he is pushing back the April 15 tax filing deadline for businesses and individuals impacted by COVID-19. As CPA Practice Advisor explains, the president did not state the date to which taxpayers will be allowed to delay their tax filings, but it is expected to be between June 15 and October 15. The U.S. House has passed legislation that aims to provide aid to individuals who already have been impacted by COVID-19.

According to The Associated Press the bill provides:

  • Paid Family/Sick Leave Paid Through Refundable Tax Credits. The bill provides that private-sector employers with fewer than 500 employees, and covered public-sector employers, must provide up to 12 weeks of job-protected Family and Medical Leave Act (FMLA) leave for “a qualifying need related to a public health emergency” to employees who have been on the payroll for 30 calendar days. This “qualifying need” is limited to circumstances where an employee is unable to work (or telework) due to a need to care for a minor child if the child’s school or place of child care has been closed or is unavailable due to a public health emergency. The first segment days of emergency FMLA leave (10 days) can be unpaid. An employee can opt to substitute accrued vacation, personal, or sick leave, but an employer may not require an employee to do so. The remainder of FMLA leave is required to be paid, generally at two-thirds of the employee’s regular rate, for the number of hours the employee would otherwise be scheduled to work. Unlike the prior bill, the revised bill limits the amount of required pay for leave to no more than $200 per day and $10,000 in the aggregate. The bill would take effect 15 days after enactment, and sunset on December 31, 2020. Click here for a full explanation of this provision. NOTE: With the Coalition for a Democratic Workplace, MSCI and dozens of other organizations sent a letter to Senate lawmakers — who had not yet considered the bill as of early Tuesday, March 19 — opposing this provision and arguing it could cause businesses to shut down or accelerate layoffs. We asked that it be replaced by an alternative. For example, the Coalition said the Social Security program could be used to provide financial assistance to American workers impacted by COVID-19. Connecting the Dots will post that letter as soon as it is available online.
  • Free COVID-19 Testing. Private health insurance plans are required to provide free COVID-19 testing and waive cost-sharing rules for testing provided to people covered by Medicare, Medicaid, and federal retirement programs. The bill also appropriates $1 billion to test people without health insurance.
  • Food Aid. The bill provides $1.3 billion in emergency food aid for low-income pregnant women and their young children, senior citizens, and food banks. It allows states to provide food stamps to make up for lost school lunch benefits if their children are kept home from school and directs $100 million of the funds to U.S. territories.
  • Additional Unemployment Benefits. The legislation provides $1 billion for additional caseloads and administrative costs to encourage temporarily furloughed workers to obtain unemployment benefits.
  • New OSHA Protections. The Occupational Safety and Health Administration is required to issue a temporary rule requiring increased protections against the COVID-19 in order to protect first responders.

The Senate was expected to consider the legislation on Monday evening, March 16, or Tuesday morning, March 17.

The bill comes in addition to a national emergency declaration that the president made last Friday, March 13. That declaration means the Federal Emergency Management Agency has access to more than $40 billion in disaster relief funding to help U.S. states fight the spread of the virus. Members of the U.S. House and Senate will continue to debate additional economic stimulus and response measures over the coming weeks. The National Association of Manufacturers has outlined several policy ideas for Congress to consider, including efforts to:

  • Accelerate negotiations on a binding “phase two” China trade agreement;
  • Develop a targeted list of products for which Section 301 tariffs and retaliatory tariffs can be suspended or removed;
  • Establish a government fund to promote geographic diversity and resiliency in the manufacturing supply chain;
  • Create a new tax credit to support the onshoring of manufacturing activities;
  • Enact legislation to allow struggling companies to use tax losses related to health emergencies to offset prior year income;
  • Pass legislation to prevent scheduled tax law changes from going into effect that would increase the cost of performing research and development; and
  • Pass legislation to prevent scheduled tax law changes from going into effect that would increase the cost of obtaining a business loan.

Click here to read NAM’s full list of recommendations.

According to a NAM survey released last week, 78.3 percent of manufacturers anticipate a financial impact as a result of COVID-19 while 53.1 percent anticipate a change in operations and 35.5 percent already are facing supply chain disruptions.